Principles of Veterinary Business

Florence Edwards
Flashcards by Florence Edwards, updated more than 1 year ago
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BVSc Year 1 (Professional Studies) Flashcards on Principles of Veterinary Business, created by Florence Edwards on 04/15/2016.
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Question Answer
What is meant by context? Surrounding environment within which a business operates
What are the 3 types of context? Internal Near External Far External
What is the internal environment? Business itself
What is the near external environment? All stakeholders in a veterinary business: Clients Competitors Suppliers Local community Local government
What is the importance of the relationship of a veterinary practice with its suppliers? Affects speed and reliability of service Affects price of products
What is the role of the veterinary practice manager/owner in terms of the near external environment? Role in balancing the conflicting interests of various stakeholders
Why is it beneficial for a veterinary practice to have a good relationship with the local community? Factors such as providing jobs and skillful marketing increase positive perception of the practice
Define a stakeholder in a veterinary practice People and organisations in the internal/ near external environment that have a legitimate interest in the activities of the practice and have a direct impact on it - the relationship is mutual as the practice can also influence or impact these people or organisations
What are the 5 main factors in the far external environment? Sociological Technological Environmental Economic Political/Legal Remember using acronym STEEPL
Give 2 examples of sociological factors that affect veterinary practices Pet ownership trends e.g. number of pet owners in the UK remaining static so veterinary practices increase prices to make a profit Humanisation of pets becoming more common
Give 3 examples of technological factors that affect veterinary practices New drugs and pet foods New equipment Digital technologies such as Facebook changing how practices market themselves
What is the difference between disposable and discretionary income? Disposable income is money left after legal and formal costs such as taxes and loan repayments Discretionary income is money left after all legal, formal and living costs
Give 4 examples of environmental factors that affect veterinary practices Climate change - increased risk of flooding New diseases and viruses such as Schmallenberg Antibiotic and wormer resistance Environmental protection measures such as waste disposal, recycling and water metering
Give 5 examples of political/legal factors that affect veterinary practices Compulsory microchipping Health and safety legislation Fire safety legislation Radiation protection legislation Employment laws
What are the 3 types of veterinary business? Sole principal/proprietor Partnership Limited company
What is a sole principal veterinary practice? Holds all responsibility i.e. suffers all risks and keeps all profits Can be a single premise, several surgeries or a veterinary group
What is the legal identity of sole principal veterinary practices? Unlimited liability company
What is a partnership? Two or more vets at a single premise or many branches Shared decision-making and profit
What is meant by joint and several liability within a traditional partnership? Individual liability of partners plus group liability for the business as a whole
What is meant by a Limited Liability Partnership? Partners' liability is limited to their investment in the business
What are the 2 possible legal identities of a partnership? Ordinary Partnership Limited Liability Partnership
What is a Joint Venture partnership? Board of elected joint venture partners direct the business and make key decisions Administrative aspects centrally managed
What is the legal identity of Joint Venture partnerships? Limited Company
What is meant by a limited company? Publicly registered charter recognising it as a separate legal entity - no individual liability for debts Owned by shareholders
What is the difference between a public and private limited company? Privately limited companies have shares not available to the public - usually shareholders are a small group of employees/partners
What is meant by a cooperative veterinary practice? Owned and operated by employees Shared profits and risks, shared ownership and decision making
What is the legal identity of not-for-profit veterinary practices? Limited Company
How is practice income usually measured? Turnover or total revenues (income) over a specified period of time, usually one financial year
Give 6 examples of direct costs for a veterinary practice Drugs Surgical materials Lab tests Clinical waste disposal Cremations Locums
What are overheads? Staff costs (salaries, pensions, training and CPD) Fixed costs such as rent, water, insurance and Internet
Give the equation to calculate gross profit Gross profit = sales - direct costs
Give the equation to calculate net profit Net profit = sales - total costs (direct costs + overheads)
How is return on investment calculated? Expresses profit as a percentage of the capital invested in the business at the start (Net profit/ capital invested) x 100
How is average transaction fee calculated? Average transaction fee = total revenues/ number of transactions
How can average transaction fee be increased? Only way to increase average transaction fee is to increase prices Clients may accept a price increase in line with inflation but unlikely to if it is greater than inflation
How is average transaction volume calculated? Number of visits/number of clients For example, if 100 clients visit a practice 120 times the average transaction volume is 1.2
How can average transaction volume be increased? Encouraging the same clients to visit the practice more often, for example through pet health schemes
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